Helps you save for future education expenses. It allows you to contribute up to $2,000 per beneficiary every year. If the money is used for qualified education expenses (including tuition, fees, books, supplies and equipment required for enrollment), income earned from the IRA will not be taxable.
- If you have three children, you can contribute $6,000 every year to an Educational IRA (remember, $2,000 maximum contribution per beneficiary per year).
- The $6,000 – and additional money you deposit each year – will grow tax-free through interest in the Educational IRA.
- When your beneficiaries begin to withdraw money for qualified educational purposes, neither you nor your beneficiaries will pay any taxes on the amount withdrawn.
- You may contribute up to $2,000 per beneficiary per year.
- An Educational IRA can support more than one beneficiary.
- You are not required to be related to the beneficiary to start an Educational IRA for him/her.
- As long as the beneficiary uses his or her income for qualified education expenses*, the distributions from the Educational IRA are not taxable.
*Qualified education expenses include, but are not limited to:
- Tuition, fees, academic tutoring, books, and supplies or other equipment incurred on account of enrollment or attendance in an elementary or secondary school.
- Expenses for special needs services in the case of a person with special needs.
- Supplies for room and board, uniforms, transportation and supplementary items (including extended day programs), which are provided or required by the school.
- Expenses for the purchase of any computer equipment or technology, including Internet access and services as long as used during any of the years the beneficiary is in school. However, any software must be predominately educational in nature.